Bankers Committee scraps SMEEIS


March 11, 2008/ Punch


The Bankers’ Committee has scrapped the Small and Medium Enterprises Equity Investment Scheme and embraced an extensive micro credit policy.


The new policy will involve state governments and other private sector operators.


The N37bn pooled under the old scheme is to be transferred to the new scheme, while the amount set aside by banks under the SMEEIS will be reviewed downwards from 10 to five per cent of banks’ profit before tax, the committee agreed at its 292nd meeting in Lagos on Tuesday.


The operations of SMEEIS have been integrated into the recently inaugurated N50bn Micro Credit Development Fund, inaugurated recently in

Abuja by President Umaru Yar’Adua.


The Group Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, said the scheme was a voluntary intervention of the banking industry for the growth and development of the country’s real sector.


He noted that, unlike in the previous arrangement, banks would now partner the states in making the set aside fund available, for on-lending, through microfinance institutions to be established by the states or the banks.


The bank chief said that the banks were also expected to choose the states they would partner with.


“Each state government will establish a microfinance institution in partnership with a bank. A bank can sponsor a microfinance institution or a private sector operator can set up a microfinance bank to key into the scheme. Such micro-finance institution can then access money wholesale from banks, while states can also on-lend,” he explained.


The committee said that some perceived inflexibilities that had made the previous scheme slow in achieving its objectives gave rise to the new shift, adding that such inflexibilities included some entrepreneurs’ preference for loan rather than equity holding.


According to the Managing Director, Sterling Bank, Mr. Yemi Adeola, “The excitement here is that this is a loan and not equity. The old equity arrangement under SMEEIS did not work well, so we are moving away from the old arrangement to a new one.”


The Group Managing Director, Union Bank Plc, Mr. Barth Ebong, noted that the new initiative would bring in more stakeholders to the fight against poverty.


The bankers also planned to inter-face with the Federal Inland Revenue Service on the common year-end, while seeking understanding and flexibility in the application of existing laws. 


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